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Business / Companies

Peak Sport closes 1,067 outlets

(chinadaily.com.cn) Updated: 2012-11-06 15:33

Peak Sport Products Co Ltd, a sportswear company in China, had cut a total of 1,067 authorized retail outlets this year by the end of September, China Business News reported on Tuesday.

Since the beginning of 2012, the number of Peak Sport outlets has been dropping sharply. According to a sales report released by Peak Sport, 283 outlets were closed in the first quarter. Another 464 were shut down in the second quarter. In the third quarter the number was 320.

Peak Sport said in its mid-year report that the average turnover of its authorized retail outlets decreased by 30 percent compared with the same period last year. The decline in the sales can be attributed to an inventory adjustment for the entire industry and the weak economic conditions that led to reduced demand for sporting goods.

Meanwhile, the value of orders Peak Sport received for the second quarter in 2013 shrank by 20 percent to 30 percent compared with the same period this year, according to the company.

The garment industry as a whole is facing great pressure. But compared with other sportswear companies, Peak Sport seems to be losing the largest number of outlets.

Unsold inventories pose a tough challenge for the garment industry. According to the China National Garment Association, the stockpile will be enough to sell for three years even if all the garment factories are shut down.

CNGA reported that the majority of Chinese garment makers are approaching the inventory alarm line, including Chinese brand names such as Li Ning Co Ltd, Meters/bonwe and Xtep (China) Co.

Analysts said that the downward trend in the garment industry will not change much in the short term, affected by various elements including the inventory problem and the general trend of China's economy.

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